Japan Display has said that it would not turn down a partnership with embattled rival Sharp after rumours started to circulate that Japan Display's top investor wants a tie-up between the two.

Japan Display’s balance sheet has a huge amount of money invested by the government backed Innovation Network Corp. INC was considering investing in troubled Sharp's LCD unit to broker a merger or partnership with Japan Display. Sharp's banks are telling it to find a buyer for all or part of its ailing LCD business within months.

Japan Display Chairman and Chief Executive Mitsuru Homma told reporters that if there were such discussions, he would not say no.

Sharp has some extremely valuable technology and manufacturing technology that Japan Display does not.

There was also a risk that if Japan Display didn’t, Sharp technology would going “to a third country" in other words Hon Hai Precision Industry Co Ltd of Taiwan.

Homma was speaking after Japan Display announced that it swung to an operating profit of $85.8 million in the six months through September. Its own misery was ended when Apple placed shedloads of orders.

Sharp's July-September operating profit tumbled 86 percent from a year earlier and shows little improvement in business since a $1.9 billion bailout in May.

According to Japan's Mainichi newspaper Hon Hai will ask the fruity cargo cult Apple to stump up a few hundred million to help with funding the purchase.

No one is commenting on all this, but it is more than a rumour, we have been feeling tremours in the force in this direction for some time, although Apple's involvement is new.

The Nikkei business daily had last week reported that Hon Hai had offered to buy the entire LCD business, but it did specify how much Hon Hai was willing to pay.Sharp was once a highly profitable manufacturer of premium TVs and screens, but competition from cheaper Asian rivals has shrunk its market share.

This year Sharp sought a bailout of roughly $1.9 billion from banks and promised to cut 10 percent of its staff.

In the past talks between Hon Hai and Sharp fell through in 2012 after the Japanese company baulked at demands that it said would have given the Taiwanese firm too much control. The two companies jointly operate a plant in Osaka that makes large LCD panels.

The troubled telly maker Sharp is in talks with Taiwan's Hon Hai Precision Industry, better known as Foxconn, for a tie-up in its struggling flat-panel display business.

Under the cunning plan, Sharp spins off the display business into a separate unit and gets cash from Hon Hai and other potential sugar daddies. One Daddy Warbucks is apparently the state-directed Innovation Network Corporation of Japan.

Sharp's chief executive, Kozo Takahashi said last month that he wanted to restructure Sharp's LCD and consumer electronics businesses, so Hon Hai's involvement appears to be part of that.But this is the second time the pair have been at the negotiating table. Earlier tie-up talks between Hon Hai and Sharp fell through in 2012. Sharp was mortified about how much control it would have to give up to have Hon Hai.

It looks like the two kept each other's numbers. They also jointly operate a plant in Osaka Western Japan that makes large LCD panels.

Sharp needs to do something this this time as government money is not going to last forever and shareholders are baying for blood. The telly business is not that productive for Sharp, which has fallen behind the more agile Korean companies like LG and Samsung.

Hon Hai Precision Industry said on it will set up a new production complex to make tablets, smartphones and components in Brazil. The company said that it will invest $500 million and create about 10,000 jobs.

In a statement, Hon Hai, the world's largest assembler of electronic devices, which trades under the Foxconn name, said the new complex in Sao Paulo will house five production sites. The company said it will sign an agreement with Sao Paulo city tomorrow.

It did not say which brand of products the site would make. Production will start in 2014 and reach full capacity in 2016.

Most of Hon Hai's plants are in China, but the company, Apple main manufacturing partner, has sought to expand in Brazil and Indonesia. It currently has eight plants in Brazil.

One of the advantages of making products locally is that they are less likely to be hit by crippling import taxes.

We have been hearing this rumor for about two weeks now, but we had difficultly verifying it until now. The Taiwan Economic News has confirmed that Hon Hai Precision Industry Co reportedly has an exclusive contract to build the Wii2 for Nintendo.

Our sources are also saying that Hon Hai will be able to start delivering the first units to Nintendo in October, but it is unclear what the run rate will be once the building is on the way. Whispers suggest that Nintendo will start ramping up production for an expected launch in North America slated for next year. Despite some suggesting a holiday launch for Nintendo yet this year, we just don’t hear it that way.

With the news from Taiwan comes word that the MSRP of the Wii2 will be an estimated $350 to $450.This number is a bit shocking for Nintendo, but actually not unexpected given the hardware that the Wii2 will be using. While others continue to report that the Wii2 will not be HD, the information we have still indicates that the console will use a modified GPU from the ATI R700 family and it will support 1080 HD.